May 9, 2013 - ASA Insights - Identifying Value in a Difficult Market

Recent volatility in the gold price has renewed focus on the mining sector. Changing sentiment towards gold miners, compounded by weakness in the gold price, has left investors in mining shares “shell-shocked” by the broad decline in valuations. After declining by 15.4%i during calendar 2012, gold mining shares have fallen another 34.2% through the end of April 2013. During April alone, gold mining shares declined by 20.8%ii. On April 12 the gold price, based on the London PM Fix, officially entered a bear market, having fallen over 20% from its high of $1,895 per ounce on September 6, 2011. If this were an old Western movie, the gold mining shares would be the ugly, the gold price the bad... but where is the good?

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